The morning news. [volume] (Savannah, Ga.) 1887-1900, 1887-06-23
THE BIG WHEAT DEAL.
1T IS SAID TO HAVE COST THE
CLIQUE $4,OOOOOo.

CLIQUE 100000.
Inside Facts on the Origin of the Cor
ner-The Cincinnatians Undertook
| Too Big Task-Kershaw 81 Co. Go
| Under At Last.
From the Chicago Ne,os
~ think know more about that wheat
panic than any other man not directly in
| terested in it," said a Board of Trade man
| Saturday II noticed this Cincinnati crowd
! long before they began active operations in
| MAY wheat, and believe now that they, or
! some of them, were trading in this market
before the close of 1886 l don't think they
then contemplated cornering May, but as it
was the active option they began to accu-
mulate it in large quantities, and when they
saw how unfavorable the crop reports be-
gan to come in they conceived the idea of
running a corner in May, taking the limit
of the storage capacity of the city and the
expected short crop as their basis of opera
| tons
About this time there was talk of a
| corner to be i"ln by the Nevada Bank peo-
pie, and l learned shortly afterward that
the directors of that institution did have
an account here with Field, Lindley & Co
and with Maurice Rosenfeld q Co. The
| talk about the Nevada Bank and the attend
ant excitement in May wheat drew the
Cincinnati people into the swim to stay,
and, the thing becoming talked over in the
| Queen City and Lincoln clubs of Cleveland,
several heavy capitalists of that town were
drawn in with them They kept adding to
their lines of May until the latter part of
| April, when they say that they had only
L., 90, 900 TO Is 900 600 bushels of cash wheat
! bought, when in order to corner the thing
successfully they should have enough to fill
all of the storage room in the city and have
| 5000, 600 to 100000 bushels of wind sold
to them by the crowd besides.
| at was decided then, | think, to carry it
over to June, and in the last few days of the
month their whole crowd of brokers ran like
a flock of sheep and filled UP on June. In
the meantime two other deals were in
| progress.
The Nevada Bank party, comprising a
class of people who speculate habitually in
mining stocks, was running a wheat deal in
! San Francisco and also began running a
| little side-play in wheat here. They kept
| adding to their lines until | know positively
that they held here from 5000, 900 to 8, 600 900
| bushels which they closed out about the
middle of May at profit averaging from
&c. to Sc. a bushel, and l am assured that
| their only reason for pulling out was that
| butl IlttNl OH bUelI IbdilJ dll VI Ull6
cash wheat in California, besides what they
called their 'side-play' in Chicago. Since
that time | notice that they have devoted all
| of their attention to the San Francisco and
| Liverpool markets, and | believe their
profits from cornering the San Francisco
market and in the Liverpool export trade
have been even larger than in their Chicago
| deal.
80 much for California. The other out
side deal was the Galveston affair. This
was little one on the side, and was indie
dependent of any of the others. Kaufman
& Runge, a big Hebrew banking house
down there who speculate in any and every
| thing that is active enough to promise a
| quick return, saw that there was a lot of
money behind wheat and they started an
account with George G.. Walker 81 Co. In
the course of time they owned quite a line
of wheat, and they applied to the Cincinnati
| parties for a section on the ground floor in
| the clique operations. They were told that
if their wheat was for sale they could offer
it in the pit They did SO, and
when Walker q Co. sold it out, Irwin,
Green g. Co. were the buyers. All of this
time the outsiders were wondering who
were running the deal. The talk was
strongest of the Nevada Bank, but Kershaw
was receiving large orders from Cincinnati
right along and attentionwas being directed
to him. About this time Armour started on
his trip South and West, and as he stopped
at Cincinnati Galveston and San Francisco,
which were the principal points talked
| about, his name became connected with the
deal. He was not in it, though, as | found
out later
The number of different parties in the
deal and their dissimilar tactics puzzled the
public more than little, and the impression
went out several times that they had
changed front and were going to abandon
the deal They did not think of this for an
instant, and had it not been for the heavy
receipts of cash wheat, the action of the
board of trade directors IN making additi-
tional storage room regular, and the atti-
tude of the banks, they would probably
have carried the deal forward to success.
full conclusion. The personnel of the Gin
cinnati contingent was Joe Wiltshire and
Howard Eckert. The amount of stuff held
by them before they collapsed was 10, 0OO, 600
bushels of cash wheat and q, 900, 900 in I'M
settled June options"
Resented was not at first identified with
| what turned out to be a Cincinnati clique,
but is credited with having come into it in
a peculiar way. Johnny Shaw was buying
heavily on Cincinnati orders, taking at one
time nearly 1,200, 900 bushels in a lump. One
day, at II AS a. m, he wired to Cincinnati
for additional margins. At 2:15 the answer
came back that IL was too late to do any
| banking business, but the next day would
see their margins good. Shaw Immediately
wired back to them to transfer their account
to another house. as he did not want to do
business with men who made and broke
promises. The account was turned over to
Resented & Co., and from that time they
were, next to Kershaw, the largest pur-
chasers of May options.
The outcome, as recent developments
show, cost the clique about S4,000,000 Thus
far the outsiders profits are yet TO be real
lied, and much depends on the outcome of
many of the suspended firms whether eny
profits at all will be credited to accounts for
deals made on the break.
ru-y g mn ~, 1oonroo